Customer Lifetime Value Calculator

Customer Lifetime Value (LTV)

The total gross profit a single customer generates over their entire relationship with your business. Calculated as ARPU × Gross Margin ÷ Churn Rate.

Average Revenue per User (ARPU)

The average monthly revenue generated per active customer. Includes subscription fees and any recurring charges.

Gross Margin

The percentage of revenue remaining after deducting the direct costs of delivering your product or service (COGS). A 75% margin means $0.75 of every dollar is gross profit.

Monthly Churn Rate

The percentage of customers who cancel or stop paying each month. A 5% churn rate means you lose 5 out of every 100 customers monthly.

Expansion Revenue

Additional monthly revenue from existing customers through upsells, cross-sells, or usage-based growth. Expressed as a percentage of current ARPU.

Net Revenue Retention (NRR)

Measures whether revenue from a cohort of customers grows or shrinks over time. NRR above 100% means expansion revenue outpaces churn — a strong signal of product-market fit.

LTV:CAC Ratio

The ratio of customer lifetime value to acquisition cost. A ratio of 3:1 or higher is generally considered healthy for SaaS businesses. Below 1:1 means you're losing money on every customer.

CAC Payback Period

The number of months it takes for a customer's gross profit contribution to repay the cost of acquiring them. Shorter payback means faster capital efficiency.

Discounted LTV

LTV adjusted for the time value of money using a discount rate. Future revenue is worth less than today's revenue, so discounted LTV gives a more conservative and realistic estimate.

Retention Curve

A visual representation of what percentage of a customer cohort remains active over time. A flatter curve indicates stronger retention and higher LTV.